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House budget puts hold on governor’s plan for Medicaid

BOSTON (AP) – A $40.3 billion state budget unveiled Monday by Massachusetts House leaders puts on hold Republican Gov. Charlie Baker’s plan for an assessment on employers who do not offer health insurance benefits to their workers.

The spending plan for the July 1 fiscal year approved by the House Ways and Means Committee would increase total spending by 3.8 percent over the current year but is $180 million below Baker’s earlier $40.5 billion budget proposal.

The House budget is “fiscally responsible, it makes some positive investments, while making sure we care for the most vulnerable among us,” said Democratic Speaker Robert DeLeo.

The plan would help preserve the state’s historically high bond ratings, he added, by further limiting the use of temporary fixes to balance the budget and directing $100 million to the state’s cash reserves, known as the rainy day fund.

The House budget drops – for now at least – Baker’s proposed $2,000-per-worker fee on companies that have more than 10 employees but don’t offer health insurance benefits. Rep. Brian Dempsey, chairman of the Ways and Means Committee, said the plan instead instructs the administration to hold public hearings before determining if such a fee is necessary.

“There are a number of things we would like to see the administration take into consideration prior to implementing any assessment,” Dempsey said.

The governor had said he proposed the employer assessment to help counter a surge in costs for MassHealth, the state’s Medicaid program, which consumes more than 40 percent of all state spending. Officials have noted a sharp rise in people who have full-time jobs yet choose to go on Medicaid either because their employers don’t offer insurance, or the coverage offered is less generous than MassHealth.

After his proposal ran into stiff opposition from business groups, Baker had indicated in recent weeks that he was open to compromise.

The House budget also calls for the Baker administration to seek a waiver from the federal government that would prohibit workers who are offered health insurance through their employers from enrolling in MassHealth. Massachusetts had such a restriction in place before it was superseded by the Affordable Care Act, sometimes known as Obamacare.

Despite a strong Massachusetts economy and low unemployment, the state’s fiscal outlook remains cloudy. Tax collections were running $220 million below official projections through the first nine months of the current fiscal year, according to revenue officials.

Other key provisions of the committee’s budget plan, which next goes before the full House:

– The plan calls for no broad-based tax increases, but accepts the governor’s plan to require more online retailers to collect sales taxes and applying the state’s hotel tax to online lodging services such as Airbnb. It also includes a new tax credit for businesses that hire veterans.

– Calls for a $106 million boost in state aid to public schools, $15 million higher than in Baker’s budget. Unrestricted aid in cities and towns would increase by $39 million, the smallest hike in three years.

– Spending on community colleges and state universities would total more than $1 billion but would increase by only about 1 percent over current spending.

– Creates a new $2.5 million program to help identify learning disabilities in children before they enter elementary school.

– Increases by $15 million funds available for rental housing vouchers to homeless families

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